Brent drops amid Russia–Ukraine peace talks
The front-month ICE Brent contract has dipped by $0.13/bbl on the day, to trade at $62.84/bbl at 09.00 GMT.
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Upward pressure:
Oil prices have been buoyed by ongoing US–Venezuela tensions.
Trump said over the weekend that the airspace above and around Venezuela should be treated as closed, injecting fresh uncertainty into the oil market given the country’s role as a major producer, according to Reuters.
“Geopolitical risks are also rising around potential US military action in Venezuela that could threaten the latter’s oil production,” added ANZ Bank senior commodity strategist Daniel Hynes.
On Sunday, OPEC+ reaffirmed a small output increase for December and paused further hikes in the first quarter of next year amid rising concerns about a supply glut. The move remains supportive for oil prices in the near term.
US crude inventories fell by 2.48 million bbls in the week ending 28 November, marking “the second straight weekly decline in inventories,” according to American Petroleum Institute (API) estimates cited by Trading Economics.
A drop in US crude stocks typically signals stronger demand and can lend support to Brent. The official Energy Information Administration (EIA) data will be released later today.
Downward pressure:
Uncertainty surrounding Russia–Ukraine peace talks has put pressure on Brent futures.
Russian President Vladimir Putin met US President Donald Trump’s special envoy Steve Witkoff and son-in-law Jared Kushner in the Kremlin on Tuesday, but just before the meeting he warned European powers that if they initiated a war with Russia, Moscow was prepared to fight. Putin also threatened to cut off Ukraine’s access to the sea in response to drone attacks on tankers in Russia’s “shadow fleet” in the Black Sea, according to Reuters.
“Oil prices traded lower yesterday as the US and Russia held talks on Ukraine,” said two analysts from ING Bank.
“Crude oil finished lower following a choppy session, as geopolitical tensions roiled the market,” added ANZ Bank’s Daniel Hynes.
By Tuhin Roy
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